British Smaller Companies VCT PLC (BSC)

BSC’s objective is to provide investors with an attractive long-term tax free dividend yield whilst seeking to maintain and build the capital value of their investment and maintain the Company’s status as a venture capital trust.

The investment strategy of BSC is to create a portfolio with a mix of companies operating in traditional industries and those that offer opportunities in the development and application of innovation. BSC invests in UK businesses across a broad range of sectors including but not limited to Software, IT & Telecommunications, Business Services, Manufacturing & Industrial Services, Retail & Brands and Healthcare. These investments will primarily be in unquoted companies.

Launch Date

1996

Last Valuation Date

30 Jun 2017

Net Asset Value

£83.71m

Net Asset Value (pps)

76.55

Total Return (NAV) & Cumulative dividends (pps)

213.00

Average annual dividend over the last five years (pps)

11.5

Cumulative dividends (pps)

136.45

Effective annual yield over last five years*

15.0%

* Based on the average dividend paid over 5 years to 30 June 2017 expressed as a percentage of the last reported NAV (30 June 2017).

The Company’s shares can be recommended to ordinary retail investors by financial advisers in accordance with the FCA’s definition of excluded security as it relates to non-mainstream pooled investments.

BSC Inside Information

As required under section 17(1) of the Market Abuse Regulation (“MAR”) this part of the company’s website separately discloses inside information related to the company, as defined under section 7(1) of MAR. This information is also included in the “Announcements” section oft the website.

BSC Performance

The table below shows the cumulative dividends, the total return on each fundraising round per ordinary share and the total return if a shareholder had opted to participate in the Company’s DRIS. The cumulative dividend and total return figures in this table exclude the benefits of all tax reliefs whilst the last two columns include the benefit of tax reliefs as noted.

Tax year

Net asset value at 30 June 2017

Cumulative dividends paid since fundraising

Total Return including fundraising*

Offer price net of initial tax relief

Offer price

Overall Return (In DRIS)**

Pence

Pence

Pence

Pence

Pence

Pence

1995/96 & 1996/97

76.55

136.45

213.00

80.0

100.0

344.95

1996/97 & 1997/98

76.55

133.45

210.00

80.0

100.0

344.05

1997/98 & 1998/99

76.55

129.70

206.25

84.0

105.0

343.92

2004/05 & 2005/06 (C share***)

86.09

114.64

200.73

60.0

100.0

358.81

2005/06

76.55

106.00

182.55

59.7

99.5

337.30

2006/07 & 2007/08

76.55

101.50

178.05

71.8

102.5

312.72

2007/08 & 2008/09

76.55

96.50

173.05

74.4

106.3

298.04

2009/10 & 2010/11

76.55

86.50

163.05

68.1

97.3

263.75

2010/11 & 2011/12

76.55

80.25

156.80

89.6

128.0

255.35

2011/12

76.55

57.25

133.80

69.8

99.8

198.13

2012/13 & 2013/14

76.55

52.25

128.80

67.0

95.8

186.53

2013/14 & 2014/15

76.55

45.75

122.30

70.5

100.8

175.60

2014/15 & 2015/16

76.55

37.75

114.30

69.7

99.5

161.09

2015/16

76.55

27.75

104.30

71.6

102.3

145.92

As at 30 June 2017

Notes

* This assumes that at the time of investment the tax relief given on the investment was not invested in shares of the Company.
** NAV plus tax relief on the initial subscription plus additional tax relief and NAV on DRIS shares purchased. Assuming that all dividends since inception were invested under terms of the current DRIS.
*** All figures have been adjusted for conversion of C Shares into Ordinary shares in May 2007

Buying And Selling Shares

The Company’s ordinary shares can be bought and sold through a stockbroker in the same way as any other company quoted on the London Stock Exchange. There may be tax implications in respect of selling all or part of your holdings, so shareholders should contact their independent financial adviser if they have any queries.

The Company operates a policy of buying its own shares for cancellation as they become available. The Company is, however, unable to buy back shares directly from shareholders. If you are considering selling your shares or trading in the secondary market, please contact the Company’s corporate broker, details above. The broker can provide details of closed periods (when the Company is prohibited from buying in shares) and details of the price at which the Company has brought in shares.

The charts below show the returns received by investors over the last 3 and 5 years to 30 June 2017 based on an initial investment of £10,000. In each case the first bar shows the return of an investor receiving cash dividends and the second bar an investor choosing to re-invest their dividends under the terms of the DRIS, thereby receiving additional shares, additional dividends on those shares and the associated tax reliefs.

On 10 February 2017 British Smaller Companies VCT plc (the “Company”) launched an Offer for Subscription (the “Offer”) to raise up to £4.25 million.

The Board is pleased to announce that the Offer has now been fully subscribed from existing shareholders, and as a consequence, the Offer is now closed to new subscriptions. As the Offer was oversubscribed successful applications are being selected by way of a ballot and it is expected that the results of this will be communicated to shareholders by 13 March 2017.

The allotment of new ordinary shares is expected to take place on 29 March 2017 and dealings in these new shares are expected to commence on or around 12 April 2017.

First Quarter End

July/August

Half Year End

November

Third Quarter End

February

BSC Directors

Helen Sinclair – Chairman (appointed 1 March 2008)

Helen has an MA in Economics from the University of Cambridge and an MBA from INSEAD Business School. After working in investment banking Helen spent nearly 8 years at 3i plc focusing on MBOs and growth capital investments. She later co-founded Matrix Private Equity (now Mobeus) in early 2000 raising Mobeus Income & Growth 2 VCT plc (formerly Matrix e-Ventures VCT plc). She subsequently became managing director of Matrix Private Equity before moving to take on a portfolio of non-executive director roles in 2005. She is currently a non-executive director of The Income & Growth VCT plc, Mobeus Income & Growth 4 VCT plc, Gresham House Strategic plc, Downing One VCT plc and Future Thinking.

Rupert Cook (appointed 1 August 2017)

Rupert specialises in corporate and business development, with twenty five years’ experience of technology, including fifteen years in corporate finance and investment. He has led multiple fund-raisings, acquisitions and sales of IT businesses as well as having co-founded and built up his own IT Services business through to sale to a UK plc. Earlier in his career, he was a senior manager at Cap Gemini plc, Director of Advisory Services at Interregnum plc and Head of Technology M&A at goetzpartners corporate finance. Rupert is the founder of Red Penguin Ventures, and was previously a partner at Realise Capital Partners, both of which are firms which advise and have investments in a range of technology businesses.

Edward Buchan (appointed 22 September 2010)

Edward is a Fellow of the Institute of Chartered Accountants in England and Wales, starting his career with Deloitte before moving to Hill Samuel Bank Limited where he became Head of Corporate Finance and a member of the Bank Executive Committee. He subsequently joined Close Brothers Corporate Finance Limited and then West LB Panmure, specialising in the transport and logistics industry sectors. He is currently a senior adviser in corporate finance at Edmond De Rothschild Securities and is a non-executive director of Wallem Group Limited, an international ship management and shipping services company based in Hong Kong.

BSC Risks

Potential investors are strongly urged to seek independent professional advice when considering an investment in British Smaller Companies VCT plc (BSC or the Company).

Although the significant tax benefits available to investors in Venture Capital Trusts (VCTs) balance the risk of the investment, there are a number of risk factors of which investors should be aware.

As with most investment products, prospective investors should be aware that the value of ordinary shares in a VCT, and the income from them, may go down as well as up and an investor may not get back the amount originally invested. The price at which the ordinary shares are traded may not reflect the net asset value of the Company. Subscribing for shares in a Venture Capital Trust should be considered as a long-term investment.

Past performance of the Company and/or investments managed or advised by the Fund Adviser should not be regarded as an indication of future performance.

Levels and bases of, and relief from, taxation are subject to change. Such changes could be retrospective. Any change of governmental, economic, fiscal, monetary or political policy could materially affect, directly or indirectly, the operation of the Company and/or its ability to achieve or maintain final VCT status.

Investors must follow certain simple steps to receive the income tax relief. It is possible for investors to lose their tax reliefs by not taking these steps. For example, if an Investor disposes of his/her ordinary shares within five years of acquisition, HM Revenue & Customs may claw back any income tax relief obtained on subscription. Investors are, therefore, advised to take their own independent financial advice on the tax aspects of their investment.

There can be no assurance that British Smaller Companies VCT plc will meet its objectives or that suitable investment opportunities will be identified.

Whilst it is the intention of the Directors of British Smaller Companies VCT plc that the Company will be managed so as to maintain its qualification as a VCT, there can be no guarantee that such status will be maintained. A failure to meet the qualifying requirements could result in British Smaller Companies VCT plc losing the tax reliefs previously or prospectively obtained, resulting in adverse tax consequences for investors, including a requirement to repay the 30% income tax relief.

Investments made by Venture Capital Trusts will be in companies whose shares are not readily marketable and, therefore, may be difficult to realise. The fact that a share is traded on AIM or PLUS-quoted (formerly OFEX) or any other stock market does not guarantee its liquidity. The spread between the buying and selling price of such companies’ shares may be wide.

Whilst run as a Venture Capital Trust, British Smaller Companies VCT plc must invest the proceeds of the Offers in companies which satisfy certain qualifying tests including having gross assets of not more than £7 million immediately prior to investment and £8 million immediately thereafter. Individually, such companies generally have a higher risk profile than larger companies.

The performance of British Smaller Companies VCT plc may be difficult to assess due to the frequency of its net asset valuations. Prospective investors should be aware that the net asset value of the company will only be audited on an annual basis and, accordingly, the ordinary shares will frequently trade at a discount to net asset value. The unaudited net asset values will be reported at quarterly intervals and will include the audited full-year net asset value and the unaudited interim net asset values.

Although the shares of a Venture Capital Trust are traded on the London Stock Exchange’s market for listed securities, there is only a very limited secondary market for shares in a Venture Capital Trust and, consequently, investors may find it difficult to realise their investment in British Smaller Companies VCT plc.

The content of this website is not an offer or invitation to apply for shares in British Smaller Companies VCT plc. Any application made for shares should be made solely on the basis of the duly approved offer document as may be issued from time to time by British Smaller Companies VCT plc and which can be accessed on this website.

Investors are strongly urged to seek independent professional advice when considering an investment in a Venture Capital Trust. You should be aware that share values and income from them can go down as well as up and you may not get back the full amount you invested. Past performance of British Smaller Companies VCT plc or any fund advised or managed by YFM is not a guide or a guarantee of the future performance of British Small Companies VCT plc. A Venture Capital Trusts shares, though listed, are likely to be difficult to realise. Prospective investors should regard an investment in a Venture Capital Trust as a long-term investment. The value of tax reliefs available depends on personal circumstances and is subject to shareholders retaining their shares for a five-year period.

The content of this website has been approved as a financial promotion under section 21 of the Financial Services and Markets Act 2000 by YFM Private Equity Limited, which is the investment adviser to British Smaller Companies VCT plc. YFM Private Equity Limited is authorised and regulated by the Financial Conduct Authority (FRN: 122120) and ultimately owned by YFM Equity Partners LLP.

Past performance of any fund advised or managed by YFM Equity Partners or any of its subsidiary companies is no guide to future performance of British Smaller Companies VCT plc. The value of investments may go down as well as up and you may not get back the full amount invested.

The investments referred to on this website may not be suitable for all investors. YFM Equity Partners Limited and its subsidiary companies (‘YFM’) are not able to provide advice on the suitability of any investment for an investor in any of the funds which we advise or manage. Nothing on this website should be construed as investment or tax advice. Potential investors are recommended to seek specialist independent tax and financial advice before investing in any fund advised or managed by YFM.

It is not intended that anything stated in this website should be construed as an invitation to treat or an offer for you to engage in any investment activity. An investment into any of the funds advised or managed by YFM may only be made on the basis of the information set out in the respective prospectus or investor guide.

Past performance of any fund advised or managed by YFM is no guide to future performance and may not be repeated. The value of investments and the income derived from them may go down as well as up and you may not get back the full amount invested. Tax rules and regulations can change over time and any benefit will also depend on individual circumstances, on Investors retaining their investments for the relevant period and on the companies invested in retaining their qualifying status.

The information on this website is directed at United Kingdom residents only and funds referred to on this website will not be offered to non-residents.

YFM has taken all reasonable care to ensure that all the facts stated in this website are true and accurate in all material respects, and that there are no other material facts or opinions of which we are aware that have been omitted where the omission of such would render this website misleading.

Venture Capital Trusts

Investors must retain their VCT shares for five years to retain the up-front income tax relief. Please remember that the tax rules and regulations governing VCTs are subject to change. The tax reliefs available to certain investors in VCTs are dependent on individual circumstances as well as the VCT maintaining HM Revenue & Customs approval. If this approval is withdrawn, a VCT will lose its status and all tax reliefs are likely to be cancelled.

The share price of a VCT may not reflect its net asset value. There is only a limited secondary market for shares in VCTs which may render such shares difficult to sell as they may not be readily marketable. VCTs invest in unquoted and AIM-quoted companies which are therefore smaller and carry a higher level of risk than shares which are listed on the main market of the London Stock Exchange. The shares of VCT investee companies may not be readily marketable. Before making an investment, ensure that you have read and understood the risk warnings set out in the VCT prospectus. An investment in a VCT should be regarded as a long-term investment. Please read our Risks section for more details on the risks involved in investing in our VCTs.

The contents of this website have been issued and approved for the purposes of section 21 of the Financial Services and Markets Act 2000 by YFM Private Equity Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number 122120.

I have read and understood the information set out in the Terms and Conditions of Use